News - 11.09.2025

VR Board Protests Cuts to Unemployment Benefits

The VR Board strongly protests the government's plans to reduce the period of unemployment benefits by a full year and to extend the qualification period for these rights, without consulting the labour movement. The Board supports the importance of early intervention and activation for people who lose their jobs, but points out that there are significant shortcomings in these areas. The government and the Directorate of Labour must demonstrate real commitment before implementing cuts to unemployment benefits. Comparisons with other Nordic countries are unhelpful, as wage earners in the Nordic region typically enjoy much greater stability and rights than in Iceland, where the economy is more volatile. If we are to look to the Nordic countries, it must be done comprehensively, by implementing a Nordic welfare system for working people in its entirety.

The VR Board considers extensive changes to the disability pension system to be positive, but it is unacceptable that the rights of wage earners are reduced to finance these systemic changes. The Board therefore protests the reduction in funding for unemployment benefits and the simultaneous abolition of the equalisation contribution to pension funds due to disability burden. The Board demands that the equalisation contribution be maintained while work is underway on a long-term solution for the interaction between disability pensions from social security and from pension funds.

The VR Board welcomes actions aimed at restricting short-term rentals and strengthening tenants’ rights, but otherwise expresses concern over the lack of action in housing matters. Housing is by far the greatest expense for the vast majority of wage earners, who are faced with some of the highest mortgage interest rates in the OECD and a loosely regulated rental market. The Board protests the unilateral cuts to the support that wage earners have had access to, as the government now intends to reduce housing benefits and child benefits and eliminate the option of using private pension savings to pay down housing loans, without offering any alternatives. A more effective approach would be to restore and expand the interest rebate system.

Finally, the VR Board wishes to reiterate that during the signing of the most recent collective agreements, the government committed to not increasing the financial burden on wage earners through higher service fees. According to the draft budget bill, patient co-payments in the healthcare system are set to rise, which could impose significant costs on wage earners and runs contrary to the spirit of the collective agreements. The VR Board also expresses general concern that the government’s austerity measures may lead to cuts in essential public services and a lack of necessary public investment in infrastructure. Although it may be tempting to save money now, this must not result in increased costs being passed on to future generations and a reduction in their quality of life.

VR Board
10 September 2025